1
Exhibit 10.11
MKS INSTRUMENTS, INC.
TENTH AMENDMENT
TO LOAN AGREEMENT
This Tenth Amendment (the "Amendment") dated as of January 1, 2000 concerns
the Loan Agreement dated as of November 1, 1993 (the "Loan Agreement"), between
MKS Instruments, Inc. (the "Borrower") and BankBoston, N.A. (f/k/a The First
National Bank of Boston; the "Lender"), as amended. Capitalized terms used
herein but not otherwise defined shall have the meanings assigned to them in the
Loan Agreement.
WHEREAS, the Borrower has requested that the Lender agree to change certain
provisions of the Loan Agreement; and
WHEREAS, the Lender is willing, on the terms, subject to the conditions and
to the extent set forth below, to amend the Loan Agreement to effect such
changes;
NOW, THEREFORE, the Lender and the Borrower agree as follows:
Section 1. Amendment of the Loan Agreement.
(a) Section 1.1 of the Loan Agreement is hereby amended by deleting the
definition of "Consolidated Tangible Net Worth" and replacing it with the
following:
"Consolidated Tangible Net Worth" shall mean, at any time, the
stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles excluding the book
amount of all minority interests in Affiliates and any foreign exchange
translation adjustment, with no upward adjustments due to a reevaluation of
assets (other than any such upward adjustment as may be required under
generally accepted accounting principles in connection with the acquisition
by the Borrower or any Subsidiary of another company or entity) minus the
following items (without duplication of deductions) appearing on the
balance sheet of the Borrower and its Subsidiaries:
(a) the book amount of all assets (including, without limitation,
goodwill, patents, trademarks, copyrights, organizational expense and
unamortized debt discount) that would be treated as intangibles under
generally accepted accounting principles;
(b) treasury stock; and
2
(c) any write-up in the book amount of any asset or Investment
subsequent to the Closing Date, resulting from a reevaluation or
reappraisal thereof from the amount entered in accordance with generally
accepted accounting principles by the Borrower or any Subsidiary on its
books with respect to its acquisition of the asset or Investment.
(b) Section 7.1(d) of the Loan Agreement is hereby amended by deleting the
word "thirty" and replacing it with the words "forty-five".
(c) Section 8.1 of the Loan Agreement is hereby amended by deleting Section
8.1(a) in its entirety and replacing it with the following:
(a) Sale of Assets. The Borrower will not, except in the ordinary
course of business, sell, transfer or otherwise dispose of, to any Person
any assets (including the securities of any Subsidiary) other than assets
having an aggregate fair market value less than seven percent of Borrower's
Consolidated Tangible Net Worth.
(d) Section 8.1(b) of the Loan Agreement is hereby amended and restated as
follows:
(b) Mergers, Etc. Neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person
to consolidate with or merge into it, or acquire all or substantially all
of the capital stock or assets of any Person, or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets to any Person, except
that
(1) a Subsidiary may consolidate with or merge into the Borrower
or another Subsidiary; and
(2) the Borrower or any of its Subsidiaries may acquire all or
substantially all of the capital stock or assets of any Person or
consolidate or merge with any Person provided (i) such Person is
engaged in a line of business substantially similar to one or more of
Borrower's existing lines of business, (ii) the aggregate purchase
price liability incurred in any calendar year, including all
contingent liabilities, when aggregated with all such acquisitions and
any Investments permitted under Section 8.4(3) in any calendar year
shall not exceed 25% of Consolidated Tangible Net Worth as of the end
of the most recent fiscal quarter or, if 80% or more of the purchase
price is paid in capital stock of the Borrower, 50% of Consolidated
Tangible Net Worth as of the end of the most recent fiscal quarter and
(iii) based on a pro forma calculation of the ratios set forth in
Section 8.7 as of the date such acquisition is closed, assuming
consolidation of the acquired business with the Borrower for the four
full fiscal quarters ended immediately preceding such closing and pro
forma
-2-
3
debt and debt service payments based on scheduled principal payments,
including acquisition borrowings, if any, and pro forma interest on
total debt at then prevailing borrowing rates, Borrower is in
compliance with the financial covenants set forth in Section 8.7.
(e) Section 8.4 of the Loan Agreement is hereby amended and restated as
follows:
8.4 Investments. Except as permitted by Section 8.1, neither the
Borrower nor any Subsidiary will make or maintain any investments,
made in cash or by delivery of property or assets, (a) in any Person,
whether by acquisition of capital stock, Indebtedness, or other
obligations or securities, or by loan or capital contribution, or
otherwise, or (b) in any property, whether real or personal, (items
(a) and (b) being herein called "Investments") except the following:
(1) Investments in direct obligations of, or guaranteed by, the
United States government, its agencies or any public instrumentality
thereof and backed by the full faith and credit of the United States
government with maturities not to exceed (or an unconditional right to
compel purchase within) three years from the date of acquisition;
(2) Repurchase agreements collateralized by securities of the
U.S. Government and U.S. Government-sponsored securities;
(3) Investments in or to any Subsidiary or other Affiliate,
provided Borrower remains in compliance with Section 8.1(b);
(4) Investments and obligations issued by the United States
government, any agency thereof, any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof with maturities not to exceed (or an unconditional right to
compel purchase within) three years from the date of acquisition that
are rated AA- or higher by at least one nationally recognized rating
agency;
(5) Investments and obligations issued by any company (other than
a bank) with maturities not to exceed three years from the date of
acquisition with a long-term debt rating of A or higher or a
short-term debt rating of A1 or P1 by at least one nationally
recognized rating agency;
(6) Investments in demand and time deposits with, Eurodollar
deposits with, certificates of deposit issued by, or obligations or
securities fully backed by letters of credit issued by (x) any bank
organized under the laws of the United States, any state thereof, the
District of Columbia or Canada having combined capital and surplus
aggregating at least $500,000,000, or (y) any other bank organized
under the laws of a state that is a member of the European Economic
Community (or any political subdivision thereof), Japan, the Cayman
Islands, or
-3-
4
British West Indies having as of any date of determination combined
capital and surplus of not less than $500,000,000 or the equivalent
thereof (determined in accordance with generally accepted accounting
principles);
(7) Shares of money market mutual funds registered under the
Investment Company Act of 1940, as amended;
(8) Foreign currency swaps and hedging arrangements entered into
in the ordinary course of business to protect against currency losses,
and interest rate swaps and caps entered into in the ordinary course
of business to protect against interest rate exposure on Indebtedness
bearing interest at a variable rate;
(9) Investments in mutual funds (other than money market mutual
funds) that in the aggregate shall not exceed $5,000,000; and
(10) Other Investments existing on the Closing Date and listed on
the Disclosure Schedule.
(f) Section 8.7 of the Loan Agreement is hereby amended by deleting
subsection (a) and replacing it with the following:
(a) Tangible Net Worth Test. The Consolidated Tangible Net Worth
as of the end of each fiscal quarter of the Borrower shall not be less
than the sum of (i) $100,000,000, plus (ii) 50% of Consolidated Net
Income (excluding losses) minus (iii) all Sub S Dividends paid between
January 1, 2000 and September 15, 2000 in an aggregate amount not to
exceed $6,000,000, for each consecutive fiscal quarter of the Borrower
beginning with the quarter ending December 31, 1999, on a cumulative
basis.
Section 2. Representations and Warranties. The Borrower hereby represents
and warrants as follows:
(a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
(b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
-4-
5
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.
(c) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of the Loan Agreement as amended hereby and the
Loan Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.
Section 3. Loan Documents. This Amendment shall be a Loan Document for all
purposes.
Section 4. Conditions to Effectiveness. The effectiveness of this Amendment
is conditioned on the following:
(a) The Borrower and the Lender shall each have executed and delivered
a counterpart of this Amendment;
(b) The representations and warranties contained in Article V of the
Loan Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof;
(c) No Default or Event of Default under the Loan Agreement shall have
occurred and be continuing; and
(d) The Lender shall have received, in form and substance satisfactory
to it:
(i) an opinion of independent counsel to the Borrower with
respect to this Amendment;
(ii) a certificate as to the Borrower's legal existence and good
standing under the laws of The Commonwealth of Massachusetts; and
(iii) a certificate of the Borrower's Clerk as to (x) no changes
in its charter documents and by-laws as amended, (y) corporate votes
authorizing the execution and delivery of this Amendment and (z)
incumbency of the officers authorized to execute this Amendment on
behalf of the Borrower;
(e) The conditions set forth in clauses (b) - (e) of Section 6.1 of
the Loan Agreement shall have been met as of the date hereof, provided that for
purposes thereof and Section 5.5 of the Loan Agreement, the "Balance Sheet Date"
shall mean September 30, 1999
-5-
6
and the financial statements referred to therein shall mean the unaudited
statements for the period ended September 30, 1999, that have been furnished to
the Lender.
Section 5. Miscellaneous
(a) On and after the date hereof, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.
(c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
(d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same document.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: William P. Donlan
Title: Treasurer
BANKBOSTON, N.A.
By: /s/ Sharon A. Stone
Title: Director
-6-
7
and the financial statements referred to therein shall mean the unaudited
statements for the period ended September 30, 1999, that have been furnished to
the Lender.
Section 5. Miscellaneous
(a) On and after the date hereof, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.
(c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
(d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same document.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By:
Title:
BANKBOSTON, N.A.
By: /s/ Sharon A. Stone
Title: Director
-6-